Kitex brands to be sold through Walmart, Target, other US retailers

Company expects to clock $50 million from US retail giants

Kitex Garments, a Kerala-based infant garments major, has made inroads with US retail giants, including Walmart, Target and others, directly. Company's two brands will be sold through the network of these retailers networks and expects to clock $50 million over the next two years.

The BSE-listed firm expects that it will become the largest infant brand end of this fiscal and double its turn over to Rs 1,000 crore by 2020.

Sabu Jacob, Chairman & MD, Kitex Garments said that the company has invested $1 million in Kitex USA to support the US business. Besides, another Rs 240 crore is lined up over the next two years to expand capacity in Kerala, which will cater to the new and existing customers.

People from Walmart and others have visited company's factories and samples were shipped on test basis. “Everything went on well. Production has started now and from September onwards shipment will start to Walmart”.

In the recent months, Target, Buy Buy Baby, Rose Stores, Amazon and others have started selling company's two brands including 'Little Star'.

The US market accounts for nearly 50 per cent of the $20 billion market. Kitex Garments Ltd (KTG) incorporated in 1992 entered this market as a supplier to mass market brand Gerber. Its client list has expanded several times. A year and half before company floated a new subsidiary to cater to the retail giants directly.

In the US, Kitex wants to target the mass market by making 10-15 per cent cheaper than the market price. The strategy is while the private label of Kitex would cater to major retailers, the Kitex brand will cater to mid and small retailers.

“We are thinking by 2020 the US business would be $50 million per year. Our realistic plan is much higher, we expect double than that, considering Walmart and Amazon alone are expected to contribute around 40-45 million”

Kitex will cater the retailers with two of its brands across 1,000-1,500 stores, owned or run by 5-7 retail brands across US.

The company expects to invest around Rs 240 crore to increase the capacity. The investment will be funded through internal accruals, subsidy and debt.